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What's in the US Budget Deal?

  • Associated Press

From left, House Majority Leader Kevin McCarthy, outgoing House Speaker John Boehner and House Majority Whip Steve Scalise discuss a late-night agreement on a two-year budget deal, on Capitol Hill in Washington, Oct. 27, 2015.

From left, House Majority Leader Kevin McCarthy, outgoing House Speaker John Boehner and House Majority Whip Steve Scalise discuss a late-night agreement on a two-year budget deal, on Capitol Hill in Washington, Oct. 27, 2015.

No government shutdown. No government default. No big spike in Medicare premiums for 15 million Americans. Looser limits on spending. And plenty of random stuff -- including a new "Freedom Foyer" in the Capitol.

There's a lot to absorb in the 144-page budget deal with the White House that departing House Speaker John Boehner is trying to nudge through Congress on his way out the door.

Things to know about the Bipartisan Budget Act of 2015:

How big a deal?

This is not the sweeping "grand bargain" to reduce long-term deficits that Boehner and President Barack Obama once aspired to negotiate.

But it at least would avert an immediate budget crisis, take care of other problems with Medicare and Social Security that were on the horizon, and give the expected new speaker, Rep. Paul Ryan, some time to get established before facing chaos. Boehner styles it part of an effort to "clean out the barn" before he hands off to Ryan.

The deal sets spending levels for the next two years that ease up on tough automatic cuts spelled out under a so-called sequester. It offsets that increased spending with cuts and savings elsewhere. The much-maligned sequester's not done for entirely, though; legislators are just skirting it for a couple years.

Shutting down talk of a shutdown

All that hand-wringing over the threat of a partial government shutdown? Never mind, for now. By establishing spending levels for the next two years, the deal removes the possibility of a shutdown engineered by conservative legislators who were threatening to refuse to approve a new budget unless they got concessions.


If Congress doesn't raise the federal borrowing limit by Nov. 3, the government would run out of borrowing authority, risking a first-ever default. The deal suspends the current $18.1 trillion debt limit through March 2017, pushing off a debt showdown until after the 2016 elections.


The deal would boost spending for Pentagon and domestic agencies by $50 billion in 2016 and $30 billion in 2017, with the new money evenly divided between defense and non-defense programs. It also would add another $16 billion in war funding above the administration's request for 2016, with comparable increases in 2017.

Taken together, Obama gets $66 billion of the $74 billion he asked for in additional spending for 2016, reversing sequestration curbs that would have essentially frozen things at current levels.


There's a long list of cuts and savings elsewhere in the budget to offset the spending increases, including:

Crop insurance: Lowers the rate of return for companies that sell crop insurance to farmers. The federal government partially subsidizes those companies and insures some of their losses. That would save $3 billion over 10 years.

Pensions. Increases the premiums that single-employer pension plans pay for their federal guarantees. $5.1 billion.

Spectrum. Requires the government to auction electromagnetic spectrum to communications companies. $4.4 billion.

Tax enforcement. Makes it easier for the IRS to audit large partnerships, including hedge funds and other investment groups. $11.2 billion.

Strategic Petroleum Preserve. Requires the sale of 58 million barrels of oil from the Strategic Petroleum Reserve. $6.5 billion.


The budget agreement would avoid an unprecedented increase in Medicare Part B premiums for about 15 million people. Here's how:

Most Social Security recipients have their Medicare premiums for outpatient care deducted directly from their Social Security payments. Social Security's annual cost-of-living increase is usually enough to cover any rise in premiums. However, next year there will be no increase in benefits.

When that happens, a long-standing federal law protects the majority of beneficiaries from having their Social Security payments reduced.

But that leaves about 30 percent of Medicare beneficiaries on the hook for a premium increase that otherwise would be spread among all.

For these people, monthly premiums were projected to increase by about $54 a month, to $159. The budget deal sets their premiums at $123 in 2016.

Social Security

Another potential crisis you won't have to hear about for a while:

Social Security's disability trust fund is projected to run out of money in late 2016. If that happened, it would trigger a 19 percent cut in benefits for 11 million disabled workers and their families.

The budget deal would add six years to the life of the disability fund by temporarily reallocating a small portion of payroll taxes from Social Security's retirement fund.

The measure also includes changes to the disability program to fight fraud and to encourage disabled workers to return to work.

'Freedom Foyer'

There's a small parting gift for Boehner in the bill: It designates a small rotunda on the first floor of the Capitol as "Freedom Foyer." Boehner started calling it that a year ago. The rotunda includes busts of freedom advocates Winston Churchill, Lajos Kossuth of Hungary and Vaclav Havel of the Czech Republic.

What's not to like?

Some conservatives are grumbling that they had no say in assembling the deal, which takes away their leverage to extract steeper budget cuts and other concessions.

Even Ryan, the speaker-in-waiting, called the bill the result of a process that "stinks."

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